CREATING A SUSTAINABLE FUTURE FOR OIL AND GAS

By Hesham El Shamy, Oil & Gas Sector Lead at Aggreko AMEA

There are formidable challenges faced by the oil and gas industry across Africa, the Middle East and Asia (AMEA) regions, but perhaps the most pressing is the need for environmentally sustainable power solutions. Currently, flaring is posing a significant threat to the sector across both its environmental impact and the cost to the company. Around 139 billion cubic metres (bcm) of natural gas are flared annually, releasing carbon dioxide (CO2), methane and black soot that affect climate change and human health. It is also directly influencing the sector’s ability to achieve Net Zero and the transformative target of the complete elimination of non-emergency flaring by 2030.

Oil and gas companies must pursue a more environmentally conscious and resilient future, focusing on Net Zero, cutting down greenhouse gas emissions (GHGs) and reducing flaring. The latter is an integral part of the sector’s operations, reducing the accumulation of potentially explosive gases, and there have been some gains in reducing its environmental impact over the past few years. Recent data has found that there has been a modest reduction of 3% in global gas flaring of 5 bcm down to 139 bcm in 2022. However, flaring was accountable for 500 million metric tonnes of CO2 in GHG emissions in the same year with nearly 70% of flared gas used in flares that burn continuously, which is both inefficient and harmful to the environment.

These numbers are not going unnoticed by the industry. Companies are committing to a reduction in flaring, integrating this commitment into their sustainability agendas and environmental responsibilities. But companies are facing what is known as the Energy Trilemma – the balance between energy security, environmental sustainability and energy equity. Companies need to reconcile their need for reliable and affordable energy with the urgency of mitigating climate change and the equitable distribution of energy resources. Flaring intersects with this trilemma as it is important to prevent the accumulation of combustible gases while ensuring safe operations, but it also directly challenges environmental sustainability. It is also an inefficient use of valuable energy resources.

The amount of gas flared in 2022 would be able to generate as much electricity as the African continent currently produces in one year if flare-to-power solutions were put in place.

This is a game-changer. Flaring needs to be used effectively and efficiently to ease the transition to Net Zero for oil and gas companies and flare-to-power solutions can put them on this road while allowing them to reduce costs and improve their environmental footprints. These solutions present an innovative and sustainable avenue to addressing the energy trilemma as they prevent the squandering of associated gas as a waste product and instead harness it as a resource.

Flare-to-power solutions bolster energy security as they optimise the use of gas, they significantly diminish emissions as they curb flaring and bolster environmental sustainability efforts, and they promote energy equity by redirecting energy resources towards productive and accessible ends. They also allow companies to optimise their total cost of energy by capitalising on the energy content of flared gas.

For example, a Middle East Operator faced a dilemma – their oil production was capped at 30,000 barrels per day (bopd) due to emissions limits resulting from excessive gas flaring. Recognizing the environmental impact and potential economic benefits, they sought a solution to utilize the excess gas for power generation while complying with emission regulations. The Operator identified an opportunity to lower emissions and simultaneously increase oil production by harnessing the excess gas for power generation. The local area suffered from a power capacity shortfall, heavily relying on liquid fuels. Utilizing the gas for power not only reduced emissions but also significantly enhanced the local power capacity.

The project involved significant capital expenditure, including the construction of a new 6km pipeline, a 33kV 7km overhead line, and an upgrade of a 33km 132kV overhead line. Flexibility was paramount, considering the fluctuating gas volume and power demand. Aggreko provided a comprehensive solution, including full gas treatment, NGL production plant, 180 MW modular Gas Generators, transformers, and switchgear. The project not only addressed technical challenges but also contributed to the local community by employing and training 30 locals for operation and maintenance.

By eliminating flaring, the Operator maximized their oil production. The project supply 165 MW to the local grid 24/7 for a minimum of 4 years, reducing power outages and stabilizing the local power network and the initiative saved costs, reduced emissions, and offset the need for additional power capacity, saving approximately 840 tonnes of CO2 per day.

Of course, there are concerns when it comes to using flared gas as a power alternative. The first is feasibility – many oil operators lack the requisite infrastructure to capture and use gas that is flared during operations. The second is reliability where operators are apprehensive about relying on such sporadic sources of energy for their primary power requirements.

However, Aggreko provides oil and gas companies with a strategic approach for flare-to-power that recognises and addresses these concerns by providing a comprehensive approach to ensure the maximum availability and reliability of these solutions. Leveraging cutting-edge technology and innovative practices, Aggreko develops solutions that align with environmental goals and ensure extracted gas is used to its full potential. The company also implements advanced measures such as on-site gas chromatographs to provide real-time gas analysis and insights into gas composition which ensure consistent and verified gas quality provided to the power plant.

Offering engineering excellence, unprecedented flexibility and scalability, and seamless flare-to-power solutions, Aggreko has the capabilities and proven expertise to help the oil and gas industry in AMEA bridge the gap between conventional and renewable energy sources with sustainable solutions that are cost-efficient, energy-efficient, and reliable.